Airline chiefs rally against APD rise

2nd Apr 2012
Airline chiefs rally against APD rise

Air passenger duty (APD) has risen by 8%, following announcements made by the Government in August.

Tax has increased by £1 to £13 for short-haul flights. Meanwhile tax on long-haul flights which are more than 4,000 miles, has increased from £85 to £92.

Following the steep increase, chief executives of major airlines have called on the chancellor to review the policy and prioritise air taxation.

In a joint statement the bosses of Easyjet, British Airways owner IAG, Ryanair and Virgin Atlantic expressed their concern for the millions of families that would be impacted in addition to the wider economy.

“APD rises again on April fool’s Day but the public should not be fooled again by this tax and the damage it does to them, to jobs and to the wider economy.

“We urge George Osborne to make APD the first tax to be examined under the Treasury’s new review of the wider impacts of taxation on the economy and to halt the proposed rise in APD to £500 for a family of four until this review is complete.”

The World Travel & Tourism Council (WTTC) recently revealed research indicating the rise in APD could cost the economy £4.2 billion in 12 months.

WTTC president David Scowsill said: “Air Passenger Duty is a completely disproportionate tax on people’s holidays and is hitting business travel hard.

“When the economy needs help, it is economically illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion.”
In the next 12 months, the UK Government will collect £2.8 billion in extra tax from air travellers, far more than any other country in the world.

David continued: “Travel grew by 4.1 per cent in the UK last year, but is forecast to slow to 1.3 per cent in 2012.

“This slowdown is partly due to the impact of Air Passenger Duty, which is dampening demand.”

In particular, it is feared that the tax will have a negative effect on trade with countries in the Caribbean, Africa and Asia.

Martin Craigs, chief executive of the Pacific Asia Travel Association (PATA), said: “The UK is an island trading nation, air services are the vital lifeblood of modern global commerce.

“The UK Air Passenger Duty is now the world’s highest by a wide margin. It is certainly turning away tourism and trade from the world’s fastest growing economic region Asia Pacific.”

“Airport Passenger Duty started in 1994 at £5 and some worthy intentions to offset aviations carbon footprint.

“Today at £85 to zone D (Asia/Pacific) it’s a ‘detention tax’ that’s restricting job growth, alienating important trade partners and not being transparently directed to green projects.

“Airport Passenger Duty maybe easy to collect but it’s also easy to see its macroeconomic damage,” he concluded.


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